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This Week's Business News

Economic Growth

The Commerce Department reported Friday that real GDP advanced 3.4% last quarter. That's far in excess of the 0.6% growth rate posted in Q1.

Top-line growth in Q2 was much higher than Q1. Inflation was much lower.

For obvious reasons, however, the report for Q2 will not receive even a fraction of the media coverage afforded to its predecessor.

Federal Minimum Wage

The media's long-sought-after increase in the federal minimum wage kicked in this week. That's the first such increase since the dog days of the Newt Gingrich era, circa 1996-1997.

Obviously in states with wage floors tied to the federal minimum wage the most direct impact will be less employment and higher unemployment for young workers in lower-level jobs, primarily in inner cities and other poor areas.

Probably the most interesting political aspect of this story is that even after non-voting conservatives went ahead and destroyed their own causes (yet again), thereby gifting over the Congress, the media/Democrats still lacked the political muscle to pass the wage floor increase as a stand-alone measure. Instead they engrafted it onto an emergency spending bill to supply and equip our troops in the field.

We can't admire their tactics. But we certainly admire the media/Democrat's ruthlessness.

Glug, Glug, Glug

Transocean and GlobalSanteFe will merge. That will create by leaps and bounds the world's largest offshore drilling concern.

Given high profits and high share prices in the energy sector, and in light of massive expansions in renewable and alternative energy -- e.g., new wind farms, ethanol, geothermal, hybrid and hydrogen cars, etc. -- it stands to reason that we'll see quite a bit of consolidation over the next few years in traditional oil and gas. If for no other reasons than (1) to expand economies of scale, and (2) thereby to reduce long-term costs as a hedge against falling demand and thus falling prices.

Mr. Market

The major stock market averages came under heavy selling pressure this week. The Dow lost several hundred points.

Color me unimpressed.

FWIW, I don't even start paying careful attention to a general stock market correction until the Dow and S&P 500 both drop at least 10% from their 52-week highs. If and when that happens I might look around particular sectors to determine if there are cheap deals being offered -- en masse. If so, then I'll consider buying stocks -- en masse.

Buy low. Sell high.

Not vice-versa.

In a Haze in Hazleton

A Clinton-appointed federal district court judge, James Munley, said Thursday that Hazleton, PA's brass-knuckled, anti-illegal immigrant law is unconstitutional.

What's your take on that ruling, Ross Perot?

Hmm.

In any event, it'll be interesting to see what the 3rd Circuit Court of Appeals does with that case. Ultimately, of course, the constitutionality of local ordnances against illegal immigrants and their employers will be decided, you know, by the U.S. Supreme Court.

Housing Market

The housing market continued to bottom out in June. On year-over-year bases existing home sales fell 11.4 percent and new home sales dropped 22.3%. Median prices for existing homes increased, however.

True Gloom

The U.S. auto industry?

Nope.

Subprime mortgage loans???

Um, no.

New York Times Co. posted a decline in total revenue, a decline in advertising revenue, a decline in circulation revenue, and a decline in operating income. Tribune Co. posted massive declines in total revenue, advertising revenue and net income.

In addition to their flagship papers, New York Times Co. and Tribune Co. publish, respectively, The Boston Globe and The Los Angeles Times.

Starbucks and Wal-Mart

My beloved Starbucks again is raising its prices. Mmmm, Starbucks.

Wal-Mart announced it's lowering prices on 16,000 items. Not surprisingly the liberal idiots/union-droids who make up those shrill anti-Wal-Mart groups had no comment.


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Comments (2)

"...the most direct impact ... (Below threshold)
Herman:

"...the most direct impact will be less employment and higher unemployment for young workers in lower-level jobs" -- Jayson

And just how significant (or, rather, insignificant) was this effect the last time the minimum wage was passed, Jayson? You know, when Clinton was in office and the unemployment rate kept going down? And what you wrote isn't even true, as the effect you describe is relatively indirect compared to the immediate effect of raising the levels of wealth for the nation's poorest workers.

"Bush 's economy" is doing ... (Below threshold)
LoveAmerica Immigrant:

"Bush 's economy" is doing great despite the dishonest spin of the liberal left. Thanks for a detailed economic post. Great job as usual.





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